Medical Insurance – What to Do If You Lose Your Job
Article by Philippe Deray
Most companies offer their employees medical insurance. After all, that is one of the number one perk that employees request – and for good reason. The cost of getting your own health insurance can be prohibitively expensive and sometimes impossible to qualify for. As long as you have your job, all is well, but what do you do if you loose your job?
What are your options?
The first thing you want to do is make sure that you look at all your options before you leave your job. With some plans, if you do not elect a medical insurance option for non-employees before you leave or sometimes within 30 days, then you may loose an important option.
The first and usually best option is to check with your spouse’s group insurance plan. If your spouse is part of a group medical insurance through his or her employer, you may be able to qualify for health insurance without any or with very few health questions to answer. This option tends to be the most economical and easiest.
COBRA (Consolidated Omnibus Budget Reconciliation Act, which became law in 1986) is the most common option used by former employees to retain health insurance. Keep in mind that you will most likely have to pay for the entire premium. Employers are not likely to subsidize former employees’ medical insurance so be prepared for some possibly high premiums. If you have health issues, COBRA may be your best option. If you feel premiums for the health insurance are too high, do not opt out of the COBRA option until you have secured an alternative plan. COBRA may not be available to you if you quit your job, only if you are laid off. Note that Obama Care may have an effect on how much you need to pay while on COBRA, so please ask your employer. Under the new law, your employer may have to partially subsidies your health insurance payments (the employer gets re-reimbursed by the government later). The time limit on this subsidy may only be 12 months.
Your other option is private health insurance. If you are in good health, then a private health insurance plan may be your best choice. It may also be cheaper than COBRA (even government subsidized COBRA), particularly if you select a more basic plan with a high deductible and co-pay. If you are not in good health, some states have enacted laws to guarantee private health insurance for everyone irregardless of health. Premiums for these plans tend to run much higher than traditional private plans and benefits can differ greatly. If you have no other choice, this may be a very good option when using private health insurance. One major advantage of private health insurance is that, once you get approved, in most cases, the plan is yours to keep for as long as you pay premium or up to a maximum age (usually 65).
Public health system is another option, particularly if you have very few assets and your income is below a certain level (as defined by each state). Applying for these plans may not be as easy as applying for private health insurance but may be easier to get approved on. The more difficult is that, very often, you need to prove that you can financially qualify and you may be required to meet with a state worker to answer questions. Some states allow people to apply and qualify by mail. Contact your local state office for questions (Google “Your State” uninsured health insurance).
If you are a member of an organization such as a fraternal organization, a club, a union or religious organization, check into their medical insurance offering. These group certificates tend to offer more benefits at lower rates. Getting approved for these plans may also be a little easier. Most do ask as many health questions as private health insurance plans so be prepared to possibly be turned down or have exclusions on your coverage.
Taking care of your health may have been the first option we should recommend. After all, if you are not sick, then you don’t have to worry about health insurance. So here is some common advise, eat healthy, exercise regularly and keep negative thoughts at bay.
With any of these options, irregardless of what anyone promised you when you applied, you must read your approved health insurance policy very carefully. It is not unusually for your approved policy to have higher premiums than originally quoted or for exclusions and riders to be included in the policy. You don’t want to find out that a certain illness is not covered by your medical insurance at the time of claim. If you have questions, you must ask your advisor or the insurance company right away. As a matter of fact, irregardless of who you select for your health coverage, feel free to ask us any questions. We hope this article helped. Be healthy!
